Recent data released by the Department of Statistics of the Bahamas government indicates a 36% increase in unemployment in the Financial Services sector in the country. This increase is attributed to multiple reasons like instances of closure of certain banking institutions and service providers, amalgamation of firms, and outsourcing of critical operations to cheaper destinations requiring fewer disclosures.
The Ministry’s report indicated that the global phenomenon of outsourcing to cheaper labor destinations has impacted Bahamas as well. Acknowledging the status of the financial services sector for the country’s economy, the report outlined a series of steps intended to minimize Bahamas’ unemployment in this critical sector by recovery of lost jobs and creation of new jobs.
The government intends to focus on wealth management and introduce new products catering to domestic and international clients into the market. The government plans to leverage the investment funds sector, which has witnessed significant growth over the past 2-3 years, to attract new firms into the country.
The authorities have also indicated their intention to focus on measures to attract immigration of High Net Worth and Ultra High Net Worth investors. Bahamas seeks to replicate the success of regional peers who have attracted wealthy investment immigrants through attractive citizenship by investment programs. The government seeks to create a liberal and open investment immigration program designed to compete with programs of regional and global competitors.
The proposed changes include offering permanent residency for those investing beyond a fixed limit in the Smart Fund, which will be an investment fund in the Bahamas. The new program is expected to complement the changes in the Insurance sector in the country and boost demand for captive insurance. The Smart Fund proposal is also expected to liberalize the real estate sector and enhance its competitiveness.
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